The family of Vincenzo Mancini, founder and chief executive of the Cisalfa Sport group, is planning to float it on the Milan Stock Exchange within the next three years, following a major reorganization that has allowed it to regain a certain level of profitability.
The flotation would be accompanied by a major program of stock options and other forms of profit-based incentives for the 2,500 employees of the group, who have contributed to its recovery.
The Italian retail group, which also owns Intersport Italia, was on the verge of bankruptcy in 2013, when the Mancini family re-purchased the 67 percent stake it had sold to an Italian investment company, Investitori Associati, in 2006.
Mancini, who founded Cisalfa in the late ‘70s and is now 64 years old, took back a company four years ago that had net debt of more than €140 million, leading to a net loss of €20 million on sales of €417 million. Now the situation is different. In the past financial year, ended in February, the group made a net profit of €12.5 million on sales of €429 million.
Its Ebitda, which was at a negative level of €5 million at the time of the takeover, has turned positive. It grew to nearly €33 million last year from €27 million in 2015. One important factor, according to Mancini, has been the development of exclusive lines sold primarily in the group's own stores, and partly also in those of Intersport's retail members. This includes licenses with Admiral, Disney, Champion, Ellesse and Mistral.
The Champion license is limited to a line of footwear and is due to come to an end in 2018, in connection with the brand's decision to develop the project internationally. Cisalfa is also working together with Arena on an exclusive line of tracksuits. It has an agreement with Fila for special make-ups in the lifestyle, running and ski categories.
In the meantime, the number of directly owned stores grew from 135 to 141 after the closing of about 20 unprofitable locations and the opening of new ones based on a new concept, dubbed Cisalfa 2.0, that has been applied to 60 stores including a flagship of more than 3,000 square meters recently opened in Rome's EUR district. The company's loyalty program has been adopted by 1.4 million customers.
Excluding Intersport Italia, whose revenues remained stable, the sales of Cisalfa's own stores rose last year by 3.4 percent to €351 million, with a 3.4 percent increase on a same-store basis, and they are expected to reach this year a level of €360 million.
The company is now targeting sales of €460 million for the current financial year. It plans to open a dozen more stores. As its web store is contributing only marginally to the turnover, it is reinvesting part of its profits in a €5 million program to develop e-commerce on an omni-channel basis over the next two years.